888 (888) shares fell by a quarter on Friday after it warned in an afternoon update that its UK gambling licence is at “immediate and significant risk” of removal by the regulator. The Gambling Commission is concerned about the involvement of activist investment vehicle FS Gaming in 888’s business after it took a 7 per cent stake last month. FS Gaming is headed by former executives of what is now Entain (ENT), which the UK tax authority is investigating for potential historic bribery offences at its former Turkish business.
The William Hill owner has now terminated discussions with FS Gaming, which had hoped to get a new chair, CEO and CFO appointed from its ranks to 888’s board. 888 shares were up by 3 per cent in early trading this morning. CA
Read more: Gambling stocks welcome watered-down white paper
CFOs cut costs as confidence sinks
Confidence among financial officers at the UK’s biggest companies has deteriorated since the start of the year, and management teams are rushing to cut costs and keep a lid on dividends, according to a study by Deloitte.
A survey of 69 chief financial officers – half of whom work at FTSE 100 and FTSE 250 companies – revealed that higher-than-expected inflation and a sharp rise in interest rate expectations was spreading corporate gloom. While CFOs expect revenues to rise over the next 12 months, the majority think that profit margins will shrink. As such, 55 per cent of respondents described cost reduction as a “strong priority”. In contrast, just 6 per cent are prioritising higher dividends and share buybacks.
“CFOs maintain an overwhelmingly defensive strategy stance,” Deloitte concluded. “Introducing new products/services or expanding into new markets – an expansionary strategy – is a distant third in CFOs’ hierarchy of priorities.” JS
Number of savers paying tax doubles
The number of savers being stung by tax bills has nearly doubled in a year as higher rates force up interest payments. Figures from AJ Bell showed 1.7mn people paid tax on interest from savings in the 2022-23 tax year, up from 972,000 the year before. The average tax bill also increased from £1,271 to £1,942.
The personal savings allowance allows basic-rate taxpayers to earn £1,000 in interest per tax year before returns are taxed at their marginal income tax rate. Higher-rate taxpayers can earn £500 while additional rate payers have no allowance.
The average interest rate on easy-access savings accounts has risen more than 14 times in the past year. The best-paying account pays 4.22 per cent, according to Moneyfacts, which means anyone with more than £23,700 stashed away faces a tax bill.
NS&I Premium Bonds allow savers to earn returns tax free, however these come with their own restrictions. TL
Read more: Can Premium Bonds fix savers’ tax problem?
Revenue and debt rises at James Fisher
Marine services business James Fisher & Sons (FSJ) said revenue from continuing operations had increased by 16 per cent in the first half of the year to £250mn but said net borrowings had increased by £14mn to £147mn in the six months to 30 June, despite asset sales bringing in around £20mn. Chief financial officer Duncan Kennedy, who joined the business two years ago, also said he would step down from his role within the next 12 months.
The increase in borrowing was the result of “normal seasonality”, an unwinding of working capital balances and costs associated with its recent refinancing, the company said.
It concluded a deal with lenders last month which extended the lifespan of its credit line to March 2025 but reduced it in size to £210mn. MF
Read more: James Fisher's new chief steadies the ship
UP Global Sourcing expects lower net debt
Kitchen and homeware specialist UP Global Sourcing (UPGS) pleased investors with an unscheduled trading update which guided for a £15mn year-end net debt figure, £6mn below market expectations. Management reaffirmed that current trading is in line with market forecasts and added that it expects the company’s leverage ratio to sit at 0.7 times at the end of July, below the 1.3 times recorded last year. The shares were up by 3 per cent in early trading. CA
